Short Window for a Big Opportunity: Why Buy Silver Now?
By Jon Swyers
If you have been watching the silver market over the past several months, you know silver prices have spiked 10% since the Fed’s non-decision in September regarding interest rates.
What you may not know is the spike motivated some sellers to trade, putting more silver back on the market.
ASI follows the silver market daily. We are happy to report the new influx of supply has cut many of the delivery delays in half or more. In addition, many premiums have dropped from 30%-40% above spot, to a slightly more acceptable 10%-30% (depending on the product).
We see silver and gold at favorable prices, with lower premiums and faster delivery times than recently available.
True, silver is no longer at a 6-year low, as it was earlier this summer. But, prices have corrected slightly since the recent spike. At current levels, silver remains a better buy than it was when prices hit a low around $14.50 per ounce.
Because demand has slowed a bit and premiums have come down, the combination of spot prices and premiums are lower now than they were over the summer. Here are some of the product prices from over the summer:
Those are some pretty high premiums to pay for silver. Even with the high premiums, there was still such a large demand for these products; people were willing to wait 8 weeks for their delivery.
This was all because silver hit a 6-year low, and prices were looking advantageous. Fast forward to right now, and silver spot prices have risen slightly. Demand for silver products has decreased slightly, and world mints have had a chance to catch-up.
Look at some of the pricing and availability for the same products now:
By comparing the two charts, you can see your best opportunity to take advantage of low silver prices is actually now, versus over the summer!
The supply easing is temporary. We believe this is your window of opportunity to make a move.
We are not out of the woods yet with regard to the problems of the summer.
Caution… it may not be long until we lose the ‘perfect storm’ of good prices, low premiums and shorter delivery times.
The first is the possibility of price volatility before the end of the year. If silver demand spikes because of either an increase in price (market in recovery), or a decrease in price (FED raises interest rates), the mints won’t be able to keep up with demand, and we will be in the same position we were in during the summer months.
The second is in the nature of minting. Mints typically wait until the end of the year to start producing their new coins for the New Year. This creates a supply shortage of current year product as they switch their production to the new coins and bars.
The secondary market sellers become the lone source of supply to the market once current year inventories are exhausted. When that supply dries up, availability is once again scarce.
Make sure you are one of those who take advantage of this temporary situation… before the next supply stressor hits.
Read more from Jon Swyers and his colleagues at Asset Strategies International in this month’s Information Line, now available to all Q Wealth Members.